Do RMDs apply to Roth solo 401k plans?

No, required minimum distributions no longer apply to Roth 401k plans including Roth solo 401k plans. You have SECURE 2.0 Act to thank for no longer requiring RMDs from Roth solo 401k plans starting on January 01, 2024. Note, however, the RMDs still apply to pre tax solo 401k funds. Therefore, you only need to process an RMD from the pre tax solo 401k and base the calculation?solely on the value of the pretax solo 401k funds.?Click here to use the solo 401k RMD calculator. Lastly, RMDs apply once the account holder reaches age 73.

RMDs and Roth Solo 401(k) Plans

• Current Status: Effective January 01, 2024 and later years,, Roth solo 401(k) accounts are no longer subject to required minimum distributions (RMDs) during the solo 401k participant's lifetime. This now aligns the Roth solo 401k with Roth IRAs, which have never had RMDs.
• Prior Rules: Before SECURE 2.0 Act changed the RMD rules, participants with Roth solo 401(k) accounts were required to start taking RMDs at age 73, similar to pre tax solo 401(k)s.
• SECURE 2.0 Act: The SECURE 2.0 Act eliminated the RMD requirement for designated Roth accounts including Roth solo 401k funds starting in 2024.
• Options for Existing Accounts: Prior to the elimination of RMDs from Roth solo 401k funds, many participants chose to roll over their Roth solo 401(k) funds into a Roth IRA to avoid these distributions. Now, this rollover is no longer necessary for those who wish to retain their funds in a Roth solo 401(k) provided they are still self-employed.

Conclusion

Starting in 2024, RMDs no longer apply to Roth solo 401(k) accounts, providing greater flexibility for retirement planning and allowing self-employed individuals to manage their solo 401k plan withdrawals according to their financial needs rather than being forced by IRS rules. This change makes the Roth solo 401(k) more attractive for retirement savings strategies.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>